tv Nightly Business Report PBS November 12, 2016 1:00am-1:31am PST
>> announcer: this is "nightly business report" with tyler mathison and sue herera. turning point. is stock kicking back? why now may be the time to change your investment strategy. >> post election portfolio, what names should you consider buying now that we know who will be in the white house come january. building a business. we'll introduce you to some veterans to went from active duty to active entrepreneur. those stories and more tonight on "nightly business report" for veterans day friday november 11th. good evening, everyone, and welcome. i'm tyler matheson. sue herera is off tonight. the trump bump didn't slump but it did flatten a bit today. it was still enough of a dow to
close at an all-time high. the run up powered by investor optimism that president-elect's policies could lift the do you was enough for the best week in pfeiffer years. today the dow jones industrial rose 40 points to a record 18,057. nasdaq added 48 and s&p 500 kind of fell a little by three. the blue chip index climbed more than 5%. the nasdaq and s&p were both up 3.8%. but how much gas is left in this market's tank? we take a look. >> reporter: stocks lost speed today but that should come as no surprise after a record high this week. the big question is how long can the rally go on. banks and stocks, both rallied big-time this week on the perception fewer regulations and oversight will transfer into more profits for drug companies
and bank companies. these sectors can only go so far without specific detailed legislation on what will happen, for example, to obama care, drug pricing and dodd/frank regulations on banking. drug stocks, for example, were down. a letter signed by 600 doctors pushed for doctors to be able to negotiate medicare drug prices. that would certainly result in lower prices for seniors but also result in lower profits for drug companies. that brings up an interesting debate. how far does all this go. do trump supporters support the potential for higher drug prices put in place, in theory, for them. asset firms and managers a notable boost. etrade, charles schwab, ameritrade up double digits. trading has been twice normal and that definitely means higher profits for trading firms. for "nightly business report"
i'm bob pisani, new york stock exchange. investors have been pouring money into index funds are, passing up actively managed portfolios. the last couple of days listing the indexes have spotlighted individual sectors and stocks. some have bounsd, others have been trounced. so will active stock picking trump indexes in the era. joining us journalist and author joining me. >> we can call our selves veterans we've been around so long. >> talk a little about, it is two days into this trump, stock picking, individual sectors, individual shares may have a bit of a renaissance because the effects of a trump presidency may spotlight individual sectors. >> it is the first tile in a while that we've seen expectations of macroeconomic policy or federal government
policy having an impact on whether it's defense spending, health care, finance. all of those industries now are in for deregulation, lower tax rates, a whole host of things donald trump has talked about. as candidate president-elect trump now discussing more completely in the interim period and likely to act on these things in the first 100 days of his office. the market sniffed that out right away. even being down 900 points election night in the futures market, that turned around on a dime. >> so there are certain things he can do in his first 100 days unilaterally. >> absolutely. >> there are a lot of things he can't do without congress, a lot of things that could get hung up in the courts. are people making big bets on sectors or individual companies, are they leaving themselves open to disappointment if some of those deregulatory changes are slow. >> he said in the campaign he was going to roll back 70% of the 20,000 federal regulations that exist. he also can do some of those things unilaterally.
even with a friendly congress, there's a good chance whether it's defunding elements of dodd/frank, whether it's defunding elements of the affordable care act, although he did make some relatively compromising comments today about what stays and what might go with respect to trade policy we'll have to wait and see on that. look at department of labor fiduciary standards rule, getting in the weeds a little bit when it comes to financial industry policy but this was the item that forced financial advisers to disclose conflicts, compensation, and also act in a client's best interest by rule. that's going to maybe be the first thing to be washed away. brokerage stocks reflected owner compliance. >> back to our initial thought, does it change the idea that indexes really ought to be the core of a lot of people's portfolios. >> it may be the core but you have to think about satellite. let's say he gets $3 to $6 trillion tax cut, whatever the size of that is. we see a reduction in tax rates. we see fiscal stimulus, see the
economy grow faster, earnings troughed out, improves, there are sectors you want to be involved with, sectors you want to avoid based on policy. so a blend of passive and active probably makes the most sense now. >> ron, thanks so much. >> good to see you. >> vice chair of federal reserve said he welcomes possibility of more fiscal stimulus out of washington, something president-elect trump has promised to deliver. suggested the central bank almost reached its goals for maximum employment and price stability and it is getting closer -- yes closer -- to raising interest rates. policymakers meet again next month. millionaire investor warren buffett who was a vocal backer of hillary clinton says it is important that the american people coalesce behind the president-elect. in an interview with cnn, he also said the stock market will be higher 10, 20, 30 years from
now. news flash. and that any notion that stocks would plunge if mr. trump won were silly. when it doit comes to wells far, he hasn't sold a single share of his holdings there since the bank admitted to creating fake accounts. deregulation of certain industries are expected during the trump administration as we were just discussing. today we learned a bit more about what the president-elect plans to do with bank rules. amin jabbers following from london. let's start dodd/frank, wall street reforms that emerged from the financial crisis. what can we expect there? >> what we're looking at is not an entire rollback of dodd/frank but more rifle shots, individual provision that they would like to see rolled back, both newly ascend ant republicans on capitol hill, incoming trump administration and also a lot of banking lobbyists say fiduciary rules for one thing need to be fixed. they would like to fix the way
financial services oversight council designates financial institutions, the so-called too big to fail rule, they don't feel that's fair to businesses considered as designees there. there's a lot there. we're also learning donald trump may be more flexible on regulation that we thought necessarily. "the wall street journal" had an interview with him this afternoon in which he said he might keep portions of obama care, the very politically popular measures that would allow parents to keep their children on their health care for an extended period of time. also this idea you couldn't block anybody with pre-existing conditions from health care. those are very popular items. trump said after talking with president obama yesterday, he's reconsidering and might want to keep those two provisions as part of an obama care overhaul, whatever he does. looks like you're looking at more rifle shots than overall repeal and replace. >> mr. trump, if nothing else, has been known throughout his
career as a dealmaker. so there will probably be lots of little deals like that one cut. there are also some changes today, amin, in his transition team. >> governor chris christie was running his transition team. that was something set up over the summer up to election day. it's sort of a hypothetical thing. it takes less precedence than the campaign it's self. now trump folks have said that the vice president lake-effect mike pence will be running the transition effort. chris christie bumped down to council vice chair, rudy ghani, giuliani, jeff sessions, those are the big names on campaign trail, rode with him in the plane, appeared by his side at the rallies. those would appear early on to be the folks in line for big cabinet positions in a trump administration. >> thank you very much. reporting from washington. donald trump has also vowed to
renegotiate the terms of the iran nuclear deal when he becomes president. hadley gam bol reports from middle east, that's just one issue leaders are watching closely. >> questions what will happen in the region. no panic yet. iran nuclear deal, signature achievement of obama administration. a lot of questions surrounding whether or not president-elect trump will attempt to appeal any part of that deal. if he's successful in doing so, whether or not that's going to have any impact on the country's ability to produce oil and whether or not prices would go up. that would be good news for private seat beltor in gcc. another question, whether or not this rapprochement with iran will impact iran and the rest of the gulf countries. saudi arabia in particular hoping, of course, they speaking to people they have spoken to
many years before in a hillary clinton administration. a lot of questions now about whether or not president-elect trump is going to be amenable to returning a more traditional foreign policy in the region. a lot of questions for them. but also some optimism as we've seen over the last 24 hours or so leaders across middle east, including saudi arabia reaching out to president-elect to congratulate him. we also heard kind words from benjamin netanyahu, israeli prime minister thrilled there would be a friend of israel back in the white house. a lot of questions but even perhaps some optimism here in the region. >> for "nightly business report," i'm hadley gamble. co-founder of delivery service grub hub said he did not ask any of his employees to resign if they voted for donald trump. some said an e-mail sent by ceo matt maloney suggested supporters of the president-elect should leave the company. maloney has since post add blog
saying he welcomes all employees regardless of their political views. maker of new balance coming under fire for a tweet related to donald trump's trade policy. reporting from san francisco. >> reporter: whoever thought making shoes in the u.s. would prove controversial. sneaker maker new balance finds it's self in a firestorm of controversy with some inflamed customers burning or tossing away their shoes and posting the videos on social media. the reason? new balance has long been an opponent of the trans-pacific partnership claiming it helped foreign manufacturers at the expense of companies that manufacture in the usa. after donald trump won the lec, a company spokesman told "the wall street journal," the obama administration turned a deaf ear to us. frankly with president-elect trump, we feel things are going to move in the right direction. the privately held company's statement is, in part, rooted in
trump's opposition to trans-pacific partnership agreement, a free trade agreement among a dozen pacific rim countries that would slash tariffs on shoes import freddie vietnam. the deal does not include china. the boston-based company has long opposed the deal for danger of domestically produced shoes for investors that rely on overseas production. new balance has a unique perspective on trade in that we want to make more shoes in the united states, not less. new balance publicly supported the trade positions of hillary clinton, bernie sanders and donald trump prior to election day. some customers, however, are supporting new balance on social media. in response to the negative tweet, one customer wrote, not in my family. we all went and bought new balance shoes, encouraging others to do the same. >> one of new balance's competitors tonight has more robust overseas operations and supports tpp. the company said the deal could
create 10,000 new engineering and manufacturing jobs in the u.s. over the next decade. for "nightly business report," san francisco. still ahead, how a trump presidency could affect your portfolio and stocks you may want to consider buying. a record day for ali baba thanks to a holiday it helped create. today is singles day in china. a day where people in that country are encouraged -- single people that is -- to buy presents for themselves. and shop they did to the tune of $18 billion, the most ever. more tonight from beijing.
>> this year's singles day isn't about big sales numbers. instead, the message from this massive online shopping day here to the u.s. is don't forget the power of the chinese consumer. singles day is an event here that celebrates chinese vendors. it started out as a small gift giving occasion for lonely hearts years ago and then it ballooned into a massive shopping extravaganza that makes it even bigger than cyber monday and black friday combined. now, at ali baba's event, one of the executives weighed in on trump's presidency. he said the u.s. president needs to remember that chinese consumers buy american products which support job creation there.
>> if you're the american president, screw to pay a lot of attention. your job is to create a lot of jobs in american society. if you don't have chinese consumers being engaged and buying american products and chinese investors can't invest in the united states and create more american jobs, then you'd be in trouble. >> separately rival jd.com said chinese consumption is good for both countries, underscoring the importance of the u.s.-china relationships, jb partnered with walmart. william leveraging off logistics network and opened a chinese store on the chinese site. >> to partner with jb, have a store will be very beneficial for sam's club. they don't have the reach yet, although they are building at a number of locations. >> walmart's investment in jd is meant to broaden the retailers
overall strategy to beef up sales online. the chinese consumer has been playing a bigger role in economic growth both here as well as in the rest of the world, but the uncertainty around trump's victory and his aggressive talk on china during his campaign is raising questions among many economists who worry that china's economy already facing a slowdown could face even further head winds into next year, which might not bode well for china's consumers. sales slow at jcpenney. that's where we begin tonight's focus. the department chain posted an unexpected decline in same-store sales and cut guidance for the year claiming weak demand for apparel and lower foot traffic. the company did see its loss narrow but revenue was below estimates. nonetheless shares up 4% to $9.16. meantime shares nvidia continue to surge following better than expected earnings after the bell
yesterday. the technology company said its results were largely helped by strong sells of its chips used for computer games. nvidia hiked its quarterly dividend by 4%, stocks soared nearly 30% today to $87.97. life lock may be exploring a sale. bloomberg said the identity theft protection company is in talks with several groups regarding a potential acquisition with final bids due this monday. it is estimate add deal could value life lock at about $2 billion. shares finished today up 8% at $19.12. as we told you last night, disney reported lower than expected quarterly earnings with results hurt by weakness in the entertainment giant's sports network, espn. the video bob iger said while espn faces challenges, he's bullish on the future. >> our outlook for espn is very positive. we know we've got comparability
factor in '17 due to the nba. we're looking at a category, live television sports, that's generally very healthy. it adopts very well to mobile platforms and that's where we're moving espn. so we feel really good about espn. we're dealing with some near term issues. eyes wide open on that. not trying to hide anything. but we think long-term prospects for espn are just fine. >> and disney shares rose nearly 3% to 9768. now to market monitor who have symptom picks he hopes will be pro picious. adviser at money management firm regents in atlanta. glad to have you here. >> it's a pleasure to be here. >> we're glad to have you. you think this two-day rally, it's early, ladies and gentlemen, could be the harbinger of better things to
come. you see the possibility of the bull market extending for a couple more years? >> i certainly think so. bull markets don't die of old age. they die when earnings stop growing, start to decline and when there's some fundamental economic risk. the u.s. economy we've grown so slow over the past few years we're not really at risk of recession. if anything, the new reality in washington creates the possibility for the next leg up what has been absent from this economic growth we had over the past few years, it's fiscal stimulus. the fed has basically been carrying the ball the entire time and now the fed is backing away. >> and we had a profit slowdown over the last year or so and the market kept moving a little bit higher. let's get to your stock pick. interesting here, none of them happened to be specifically infrastructure plays. that was kind of fiscal spending. let's start with cisco. how do you like it? what do you see this there? >> what's interesting, over the past year american companies hoarding cash abroad. there's reasons for that but the
single biggest one, we have a punitive tax rate to earn profits abroad and bring them back home as cash. the last time we had -- >> people keep the profits overseas. >> they do. they wait for a better opportunity to bring them here. here is why. last time we had clean sweep for republicans in the white house. in both chief of congress passed a law that allowed those companies to bring profits back home at much lower tax rate than statutory 35%. that is not only entirely possible this time around but highly likely. why is that good for cisco? it's one of the companies that stashed tens of billions abroad. what will they allow cisco today? pay a high one off dividend. microsoft a good example. last time republicans did that paid 11% one-time special dividend. >> number two, another big blue chip. johnson & johnson. >> johnson & johnson, another sector that's likely to benefit from the republican administration. it's really one that suffered from fears of a democratic
administration. former companies have been attacked by hillary clinton and others in the democratic party about drug prices. that's one of the reasons health care is so expensive in the u.s. that fear evaporated in the matter of two days. you saw companies like pfizer rise by almost 10% in that two-day period. johnson & johnson is a good play. one, it's much more diversified, not just pharmaceutical company. they make everything from band-aids to drugs to medical devices. so i think it's a better way to invest. >> we've got 30 seconds on n northrop grommen. >> they tend to be defense spending, not just his policies but northrop is a defense contractor and they will likely benefit from the administration. >> thank you.
first, how commodities and currency fared today. the bond market closed for veterans day. today americans came together to honor those who have served the nation on this veterans day. president obama paid tribute by laying a wreath at the tomb of the unknowns in arlington. during the address he thanked the nearly 19 million americans for their service and said veterans offer a unifying example of what's right with the u.s. on wall street, the new york stock exchange traders observed a moment of silence. one in ten small businesses is veteran owned. making a transition from the structured world of the military to more improffersation aa aa a
improvisational one can be an enterprise. here they do it. >> went up and down the highway inspecting the roads to see if there's anything out of the ordinary. >> went from clearing explosive devices from afghanistan's roads to trying to navigate another territory also foreign to him, the business world. >> so just like in war, it's completely unknown. >> he founded a company. >> i can send messages to different people. >> it's meant to be a social media platform for students in film, media and theater. >> our main focus is connecting the students who they need to be part of their crew. those production companies, their assistance with their media and projects. >> i think the hardest part has been continuing to navigate in a sea of the unknown. >> but for raymond, and over a dozen other veteran startup -- navigating unknowns was made easier. >> they have technical skills and capabilities. >> a former military prosecutor
himself, who now gives legal advice pro bono to veterans who want to start their own business. through his new york-based law firm. >> we're there to bridge that gap in materials of the legal and business side of things. >> what do you think about the schedule? >> position in the military. i retired as a lieutenant colonel. >> linda brown opened soul food restaurant a few months ago was able to take advantage of those services. >> they really led us and guided us through the maze of all the legalities of opening up a business. >> according to the small business administration, nearly one in ten small businesses in the u.s. are veteran owned generating over $1 trillion in sales. veterans are also about 45% more likely to be self-employed than nonveterans. >> veterans have so much to bring to the economy and workforce. law firms, consulting firms, accountants can bring one-on-one technical advice to veterans who are starting new businesses. >> linda's advice for veterans
looking to take on a new challenge after transitioning to civilian life. >> have you to have a really good business plan, stick to it. if you do it, you can do it. you really can. >> for "nightly business report." >> that was good. veterans given council on articles of incorporation to following laws and procedures when setting up shop. those advising him say who better to know benefits of hiring next generation of vets than veterans themselves. that is "nightly business report" for veterans day. i'm tyler mathison. thanks for watching. thanks for serving. have a great weekend. we'll see you monday.
pete:donald trump goes from political novice to commander-in-chief. can the ultimate outsider turn promises to make america great again into real policy? and what will it take to unite a nation?ivided plus, democrats must decide what their role will be as the minority party. i'm pete williams in for gwen tonight on "washington week." the transition begins. >> it is important for all of party, andess of regardless of political comerences, to now together. mr. trump: i very much look forward to dealing with the president in the future. pete: president-elect donald his agendas plotting knowing he'll have a congress led by republicans. >> donald trump heard a voice in this country that no one else heard.